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Home > Financial Services > Mutual Funds > Nicholas.
Nicholas.
Nicholas Company is an independently owned investment management firm established in 1967 by Ab Nicholas. They offer a disciplined approach to investing in high quality growth stocks. Nicholas is well known for its disciplined valuation process, independent research and long-term investment philosophy.
The Nicholas Funds are offered only to United States residents. At Nicholas, their equity investment philosophy is straightforward. They work to build wealth for their clients by purchasing high quality, growth companies that are reasonably priced. Their objective is to find individual companies that they believe are positioned to outperform their peers and the market.
Their managers and analysts look for companies that are growing steadily, experienced and honest management, have strong balance sheets, and formidable competitive advantages.
The Nicholas Fund’s management team believes that company selection is the key to providing superior returns over time. When selecting portfolio holdings, from among the stocks that meet their criteria, they often take a contrary view and choose lesser known or out-of-favor companies as they generally offer the best values. Their goal is to find growth companies that are reasonably priced by identifying stocks that have low price-to-earnings ratios relative to their earnings growth or those that are attractively priced relative to book value. Above average earnings growth and strong future growth potential are important characteristics in the companies we consider.
Some of the factors they consider in assessing companies include Growth rate of 10percent or better, Consistent earnings, Return on equity of 15percent or an improving ROE, Debt to total capitalization of less than 50percent, A price to earnings ratio lower than two times the growth rate, An enduring franchise or brand, capable management, Honest, Significant management ownership of stock, and Long-term and short-term business momentum.
It is their strong confidence that superior long-term results are accomplished by minimizing capital losses in unpleasant markets. Their portfolio turnover is moderate as their goal is to find, and hold, great companies. However, if a company’s stock is not meeting their expectations, or has become over valued, they will sell it. At Nicholas, their watchword is patience. They do not attempt to forecast short-term market swings, but work to protect gains and minimize losses using long-term, fundamental valuation methods. They believe it is the key to superior long-term results.
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